MANOHAR V. KUKREJA, MUMBAI V. ITO 19(3)(3), MUMBAI

ITA 3705/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75231 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH BARE
• Assessee Lawyers: B V JHAVERI
• Keywords: Corroborative evidences

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND RAJENDRA (AM) . . , , ./I.T.A. NO.3705/MUM/2012 ( / ASSESSMENT YEAR : 2008-09) SHRI MANOHAR V KUKREJA 18, SILVER PALACE 880/883, PALI MALA ROAD, BANDRA (WEST), MUMBAI-400050 / VS. INCOME TAX OFFICER, 19(3) (3) , PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400012 ( & / APPELLANT) .. ( ' & / RESPONDENT) ./ ./PAN/GIR NO. : AAGPK3103Q & / APPELLANT BY : SHRI B V JHAVERI ' & * /RESPONDENT BY : SHRI GANESH BARE * - / DATE OF HEARING : 11.12.2013 * - /DATE OF PRONOUNCEMENT : 1.1.2014 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT Y EAR 2008-09 AGAINST ORDER OF LD. COMMISSIONER OF INCOME TAX(A) DATED 26.3.20 12 DISPUTING THE CONFIRMATION OF ADDITION OF RS.2,40,041/- UNDER THE HEAD INCOME FROM OTHER HEAD INSTEAD OF TAXING IT UNDER THE HEAD CAPITAL GAIN, AS OFFERED BY ASS ESSEE IN THE RETURN FILED. 2. RELEVANT FACTS GIVING RISE TO THIS APPEAL ARE TH AT THE ASSESSEE IS A OWNER OF FLAT IN PALI PALACE CO-OPERATIVE HOUSING SOCIETY, IN SILVER PALACE BUILDING SITUATED AT 883- 83, PALI MALA ROAD, BANDRA (WEST), MUMBAI-400050, S INCE 1973. PURSUANT TO AMENDMENT IN DEVELOPMENT CONTROL REGULATIONS ACT IN 1991, AN ADDITIONAL FSI OF 14,040 SQ.FT. (BUILT UP) IN THE FORM OF TDR BECOME AVAILABLE TO THE SOCIETY. THE MEMBERS OF THE SOCIETY RESOLVED TO PERMIT M/S SAR ANGA ESTATE PVT.LTD (DEVELOPERS/BUILDER) FOR PUTTING UP ADDITIONAL FLOO RS ON THE EXISTING SILVER PALACE BUILDING BY CONSUMING ADDITIONAL FSI OF 14040 SQ.F T IN THE FORM OF TDR FOR TOTAL I.T.A. NO.3705/MUM/2012 2 CONSIDERATIONS OF RS.2,34,60,840/-. ACCORDINGLY, THE AGREEMENT FOR DEVELOPMENT WAS ENTERED INTO IN APRIL 2001 AND THE ASSESSEES SHAR E WAS RECEIVED OF RS.12,66,940/- IN THE YEAR 2003. THE SAID AMOUNT WAS OFFERED AS L ONG TERM CAPITAL GAIN (LTCG) BY THE ASSESSEE. THERE IS NO DISPUTE THAT THE SAME WAS ALSO ACCEPTED AS LTCG. IN THE SEPTEMBER 2007. IT IS STATED THAT THE ASSESSEE REC EIVED AN AMOUNT OF RS.2,40,041/- FROM THE SAID BUILDER/DEVELOPER AND CLAIMED IT AS LTCG. THE ASSESSEE INVESTED RS.2,50,000/- ON 14.09.2007 IN CAPITAL GAIN BONDS OF RURAL ELECTRIFICATION CORPORATION LIMITED AND CLAIMED EXEMPTION U/S 54EC OF THE ACT. AO HAS STATED THAT AS PER COPY OF AGREEMENT FILED ON RECORD DATED 11.4.2001, THE SAI D CAPITAL GAIN HAD ALREADY BEEN ACCOUNTED FOR /REQUIRED TO BE ACCOUNTED FOR IN THE ASSESSMENT YEAR 2002-03 RELEVANT TO THE DATE OF EXECUTION OF AGREEMENT WITH THE BUILDER . THE AO HAS STATED THAT THE ASSESSEE HAS NOT PRODUCED ANY SUPPORTING EVIDENCE W ITH REASONS FOR FURTHER RECEIPT OF AN AMOUNT OF RS.2,40,041/- DURING THE YEAR UNDER C ONSIDERATION I.E. ASSESSMENT YEAR 2008-09. HENCE, NATURE OF RECEIPT IS NOT ASCERTAI NABLE FROM THE ASSESSEES SUBMISSIONS. AO CONSIDERED THE SAID AMOUNT RECE IVED IN THE NATURE OF MISCELLANEOUS RECEIPT AND ASSESSED IT UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY, EXEMPTION CLAIMED BY ASSESSEE UNDER SECTION 54EC OF THE ACT IS ALSO DENIED. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. ASSESSEE MADE THE SUBMISSIONS ON THE LINES OF SU BMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW. IT WAS SUBMITTED THAT THE BALAN CE OF INITIAL CONSIDERATION AN AMOUNT OF RS.2,40,041/- WAS RECEIVED BY ASSESSEE FROM THE DEVELOPER IN SEPTEMBER, 2007 AND ACCORDINGLY THE SAID PROCEEDS RECEIVED FROM THE DEV ELOPER HAS BEEN OFFERED FOR TAXATION UNDER THE HEAD LTCG AND EXEMPTION U/S 54EC HAS BEEN CLAIMED. LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ACTION OF AO VIDE PARA 2.3 OF THE IMPUGNED ORDER WHICH IS AS UNDER : 2.3 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. THE AO MADE THE A DDITION OF RS.2,40,041/- AS INCOME FROM OTHER SOURCES AS THERE IS NO DIRECT NEX US OF THIS RECEIPT WITH THE COMPENSATION DETERMINED FOR REDEVELOPMENT AND SALE OF ADDITIONAL FSI. THE AO HELD THAT THE AMOUNT RECEIVED OF RS.2,40,041/- IS I N THE NATURE OF MISCELLANEOUS RECEIPT AND IS REQUIRED TO BE TAX UNDER THE HEAD I NCOME FROM OTHER SOURCES. THE AO ACCORDINGLY TAXED A SUM OF RS.2,40,041/- UND ER THE HEAD INCOME FROM OTHER SOURCES AND DENIED EXEMPTION U/S 54EC OF THE IT ACT. I FIND THAT THE AO IS QUITE JUSTIFIED IN TAXING THE SUM OF RS.2,40,041/- AS INCOME FROM OTHER SOURCES FOR THE REASONS GIVEN IN THE ASSESSMENT ORDER. AS R EGARDS TO THE CASE LAWS CITED BY THE APPELLANT, IT MAY BE STATED THAT THESE CASE S ARE NOT DEALING WITH INCOME FROM OTHER SOURCES. THEY ARE ON THE ISSUE OF CAPI TAL GAINS AND ITS TAXABILITY AND THEREFORE, THE SAME ARE DISTINGUISHABLE ON FACTS. IN VIEW OF THE ABOVE, THE ACTION OF THE AO OF TAXING THE SUM OF RS.2,40,041/- AS INCOME FROM OTHER SOURCES IS ACCORDINGLY UPHELD. THE GROUND OF APPEA L IS DISMISSED. I.T.A. NO.3705/MUM/2012 3 HENCE, THIS APPEAL BEFORE THIS TRIBUNAL. 4. LD. AR MADE HIS SUBMISSIONS ON THE LINES AS MADE BEFORE THE AUTHORITIES BELOW. HE HAS FILED BRIEF STATEMENT OF FACTS AND STATED T HAT THE ASSESSEE RECEIVED AN AMOUNT IN TRENCHY AND OFFERED IT FOR TAXATION AS LTCG IN A SSESSMENT YEAR 2001-02, 2002-03 AND 2003-04 AND THE SAME WAS ACCEPTED BY DEPARTMENT. H E SUBMITTED THAT THE ASSESSEE ALSO RECEIVED THE SUM OF RS.2,40,041/- ON 7.09.200 7 IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE SAME IS OFFERED FOR TAXATION AS LTCG. THE ASSESSEE REFERRED PAGES 76 TO 80 OF THE PAPER BOOK WHICH IS A COPY OF BANK STATEMENT AND SUBMITTED THAT THE SAID AMOUNT WAS CREDITED TO THE ASSESSEES ACC OUNT AS PER ENTRY APPEARING AT PAGE 80 OF THE PAPER BOOK. HE FURTHER REFERRED PAGES 8 1 AND 82 OF THE PAPER BOOK WHICH IS A COPY OF LETTER DATED 27.5.2011 FROM SARANGA EST ATE PVT. LTD CONFIRMING THAT ASSESSEE WAS PAID AS MEMBER OF PALI PALACE CO-OPERATIVE HO USING SOCIETY A SUM OF RS.2,40,041/- ON 7.9.2009 VIDE CHEQUES DATED 2.8.20 07. IN REPLY TO QUERY AS TO WHETHER THE COPY OF THE SAID LETTER WAS PLACED BEFO RE THE AUTHORITIES BELOW, THE LD. AR STATED THAT THE SAID LETTER WAS PLACED BEFORE LD. CIT(A), BUT HE HAS NOT MENTIONED THE SAME IN THE IMPUGNED ORDER. LD. AR ALSO COULD NOT PLACE ANY EVIDENCE TO SUBSTANTIATE HIS CONTENTION THAT COPY OF THE SAID LETTER OF CO NFIRMATION FROM SARANGA ESTATE PVT. LTD DATED 27.5.2011 WAS PLACED BEFORE THE LD. CIT(A). HOWEVER, LD. AR REFERRED PAGE 8 OF THE PAPER BOOK WHICH IS A COPY OF THE RECEIPT OF RS.2,40,041/- GIVING DETAILS OF CHEQUES NUMBERS AND BANK FOR RECEIVING THE SAID AMOUNT. HE SUBMITTED THAT THE SAID AMOUNT WAS RECEIVED AS FULL AND FINAL SETTLEMENT PURSUANT TO THE SAID AGREEMENT ENTERED INTO BY THE SOCIETY AND BUILDER/DEVELOPER AND THE SAME S HOULD BE CONSIDERED AS LTCG. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS OF AUT HORITIES BELOW. HE FURTHER SUBMITTED THAT THE ASSESSEE RECEIVED A SUM OF RS.50,000/- AS GOODWILL AND NOT CONSIDERATION AMOUNT TOWARDS FSI. 5. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF AUTH ORITIES BELOW AND SUBMISSIONS OF LD. REPRESENTATIVES OF THE PARTIES. WE HAVE ALSO P ERUSED THE RELEVANT PAGES OF THE PAPER BOOK. ON PERUSAL OF THE LETTER PLACED AT PA GES 81 AND 82 OF THE PAPER BOOK, WE OBSERVE THAT THE ASSESSEE RECEIVED A SUM OF RS.2,4 0,041/- IN THE ASSESSMENT YEAR UNDER CONSIDERATION FROM THE SAID BUILDER BUT THE A SSESSEE COULD NOT PLACE THE SAID LETTER BEFORE THE AUTHORITIES BELOW AS IS EVIDENT F ROM THE ORDERS . HOWEVER, THE LD. AR SUBMITTED THAT THE SAID LETTER WAS FILED BEFORE LD . CIT(A) BUT HE COULD NOT FILE ANY CORROBORATIVE EVIDENCE TO SUBSTANTIATE HIS SUBMISS IONS. THERE IS NO REFERENCE OF THE I.T.A. NO.3705/MUM/2012 4 SAID LETTER EVEN IN THE ORDER OF LD. CIT(A). CONS IDERING THE FACTS IN TOTALITY, WE CONSIDER IT PRUDENT THAT THE MATTER BE RESTORED TO THE FILE OF AO TO DECIDE THE SAME AFRESH AFTER CONSIDERING ALL THE DOCUMENTS AS MAY BE PLACED BEFO RE HIM AND IF THE SAID AMOUNT OF RS.2,40,041/- WAS ALSO A PART OF THE DEVELOPMENT AG REEMENT ENTERED INTO BY SOCIETY WITH THE DEVELOPER, THE SAID AMOUNT SHOULD ALSO BE CONSIDERED AS PART OF STCG AND CONSEQUENTLY, THE BENEFIT OF SECTION 54EC SHOULD BE GRANTED ON RECEIPT OF DETAILS FROM THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2014. C D 08.01.2014 * SD/- SD/- ( / RAJENDRA) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI:ON 08.01.2014 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. & / THE APPELLANT 2. ' & / THE RESPONDENT. 3. H ( ) / THE CIT(A)- CONCERNED 4. H / CIT CONCERNED 5. I 'K , - K , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, (ASSTT. REGISTRAR) - K , /ITAT, MUMBAI